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Blogs about The Winning of The Carbon War

Recharge, 3 Mar 2015
The triple whammy giving oil executives sleepless nights
"Picture yourself as a Big Energy chief executive, surveying three megatrends. The first is your soaring cost base and the growing dissatisfaction of your investors about it. The second is the plunging cost base of your clean-energy competition and the increasing bullishness of analysts about that. The third is the worrying direction of climate policymaking. Any one would be bad enough. But all three at once?...
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Virgin Unite, 2 Mar 2015
The winning of the carbon war
"Writer, campaigner and social entrepreneur, Dr Jeremy Leggett is the founding director of Solarcentury - the UK's largest independent solar electric company. Ahead of the Paris Climate Summit in December, Jeremy is releasing a free-download, live series around the winning of the carbon war, with the vital final scene played out on the last night of the summit. Today we share part one...
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Prominent climate denier’s work was funded by energy industry. And Willie Soon did not declare the $1m+ from ExxonMobil et al in papers.IPCC chair misses meeting due to sexual harrassment claims. Rajendra Pachauri claims his e-mail account was hacked to send in appropriate messages.
20.2.15.US will install air pollution monitors on embassies worldwide. The State Department hopes to replicate the success of its Beijing embassy, notably in India, as a route to climate progress.US proposes new safety rules for Arctic drilling. They include capability to deploy a capping stack to plug the well within 24 hours, and a containment system within seven days.Harvard star alumni join divestment campaign. A letter boosts the students as they take the university to court.Russian expansionism may pose an “existential threat”: NATO General. Sir Adrian Bradshaw, the most senior British officer in NATO, talks of an era of “constant competition”.UK on track to hit 2020 renewables target of 15% in energy mix. As of 2013, ONS statistics show 15% of electricity comes from renewables.
19.2.15.Apple wants to start producing EVs, and as soon as 2020. It has been working in secret on an EV with a team now of 200 people and poaching Tesla and battery company staff.New hope that EU could ban tar sands. EU fuel quality directive gets a reprieve, opening the way for tar sands oil to be taxed out of the market.World’s biggest PR agency parts ways with American Petroleum Institute. After more than $300m in billings, Edelman ends a relationship giving it a PR problem.“Five charts showing how BP’s vision differs from a climate-friendly future.” Carbon Brief compares the BP Energy Outlook with the IEA’s Two Degrees scenario.
18.2.15.G20 climate pledges likely to determine success of Paris summit. So says a top EU official. A legally binding core is vital, and transparency and accounting are on the table for that.NOAA predicts 2015 could see coral bleaching on a global scale. If so, it be the third time in history and the first in the absence of an El Nino.

Oil and gas industry protests Davey talk of “risky” assets. Oil & Gas UK letter of protest to the Secretary of State says industry is “deeply unsettled” about risk to investor sentiment.“Buffett dumping Exxon points investors to review oil bets”: Bloomberg. Berkshire Hathaway has sold all its shares in the last quarter of 2014. Also dropped ConocPhillips.Investors will say “game over” for most fossil fuels. Sooner than most people can imagine. Jeremy Leggett interview in Economic Valor (Brazil).Saudi Arabia burned >500,000 bd for power in 2014, the highest ever. Exports fell 5.7% to 7.11 mbd, reflecting Chinese demand drop. Saudi produced an average 9.7 mbd.“OPEC Production Cut May Not Be Needed After All”. So says Art Berman: U.S. tight oil production may fall 600,000 bpd by June 2015 based on projections of current rig counts.Gazprom presses ahead with pipeline to Turkey after South Stream dropped. CEO says shipping via Ukraine may halt in a few years. EU would need own pipelines from Turkey border.California regulators allow PG&E to enable customers to go 100% solar. Customers could opt for 100% as soon as the end of 2015. Average for all customers is now 25% RE excl hydropower.
17.2.15.Rising energy demand at odds with fight against climate change, BP boss says. But it is up to governments to address this.IEA: rising Middle East militancy poses “major challenge” for oil supply. Fathi Birol says investors are being put off, stoking a supply problem.World’s biggest offshore windfarm given go-ahead off Yorkshire. The Dogger Bank Creyke Beck project, 200 turbines at 2.4 GW, will be capable of supplying about 2.5% of UK electricity.
16.2.15.Oil traders celebrate the market rout from low oil prices. “The more volatility, the more arbitrage”, says one. What they call the contango is high at the moment.Actis to set up a $1.9bn renewable energy business in Africa. The UK-listed private equity group will create Lekela Power, a joint venture with Mainstream, a wind and solar developer.6,000 mosques to go solar in Jordan. Jordan’s Ministry of Energy and Mineral Resources teams with its Ministry of Awqaf and Islamic Affairs, first on 120, eventually all

Discoveries of new oil and gas reserves drop to 20-year low. This is the fourth consecutive year of falling discoveries, with no discoveries of giant fields.“BP’s battles leave it vulnerable to a major move”: FT. “If ExxonMobil chief executive Rex Tillerson really wanted to, he could snap up BP in a single bite.”Is there a bubble emerging in corporate bonds? Signs of distress on are appearing in EM companies after years of “often indiscriminate buying” of their bonds.Are spy agencies funding climate research in hunt for weather weapon? A leading American climate scientist tells the AAAS that he believes so.
14.2.15.Cameron, Clegg and Miliband all sign strong climate action pledge. They call for unabated coal phaseout and 2 degrees C binding treaty in Paris.Al Gore: “inspired leadership”.
13.2.15.Climate talks: countries agree draft text for Paris treaty negotiations. Almost 200 countries finalise 86 page basis for negotiations. It includes net-zero carbon by 2050.Global Divestment day: Hundreds of events in 48 countries spanning six continents. In the UK rallies and protests include London, Bristol, Oxford, Nottingham, Swansea and Edinburgh.Achieving near-zero emissions in 2nd half of century is central to the Paris deal. So says UN climate chief Christiana Figueres at close of Geneva session. There are 15 options in the text.US drill-rig count now down 30% since October. “The rig counts appear to be in free fall”, Bloomberg comments, amid “mounting evidence of an industry in distress”.Brent rises above $60 as oil companies cut back. EIA figures show US production at a record high of 9.23 mbd since the agency started collating data, in 1983.Norwegian drill rig operator strikes off $1bn of orders with Petrobras. Seadrill says it no longer believes the company will go ahead with business agreed.
12.2.15.US shale may not bounce back if oil price rises. If finance flows dry up, so will resurgent output.Global oil layoffs pass 100,000. US shale is worst, but the pain is global as oil boom towns begin to turn into ghost towns.Tesla plans to unveil battery storage for growing residential market soon. CEO Elon Musk says details are coming within a month or two.Fracking “never felt sustainable”. In 2013, US shale was responsible for c.20% of world investment in oil, while only supplying 4% global production. Today? Grimmer.Shell boss: fossil fuel critics are “naïve” but Big Oil has a “credibility issue”. Ben van Beurden speech to an industry gathering suggests industry is becoming “rattled” by carbon bubble.Fossil-fuel companies hit back at divestment movement. Crude videos and websites such as “Big Greeb Radicals” push an extreme defence of status quo.Koch-funded attack website focused just on solar. Its rationale: “Shining a light on the dark side of solar power. Billions blown on solar offer little bang for the bucks.”“Note to Shell: Most of your critics don’t want a ‘sudden death’ for fossil fuels.” Ben van Beurden is resorting to straw man arguments, says Business Green.Fracking will be allowed under UK national parks. Infrastructure bill amended to allow horizontal drilling from outside parks.EDF delays investment decision on Hinkley Point until after election. Negotiations with potential partners stall over Chinese demands.
11.2.15.US shale oil boom masks declining global supply. So Mark Lewis argues in the FT that when rig count translates into output, up will go the oil price: by Q3 or Q4.“Oil prices may recover, but not LNG.” Low US prices favoured exports to high-price Asian countries. But slow growth in Asia and other factors will meanlow LNG prices for a while.Apple deal and tax change “could spark corporate solar stampede.” Apple is buying nearly $1bn of power from a First Solar project: the biggest ever solar PPA.Belectric trials grid-balancing storage at UK solar farm. With a similar project underway in Germany, the company talks of storage bringing a “new era for renewables”.“Storage is today where PV was six or seven years ago”. Says a consultant in this review of energy storage and the 362 MW or projects announced 2013-14. Largest 5 MW.UK threatens retaliation if Austria takes legal action over Hinkley Point. HMG says it will take every opportunity to damage country, unless legal case over nuclear reactor, is dropped.
10.2.15.Officials warn Paris won’t achieve 2 degrees target. But the treaty can set the direction of travel so clearly that the target can still be hit beyond via the sum of individual national action.IEA forecasts $60 oil for another two years. “The price correction will cause the North American supply ‘party’ to mark a pause; it will not bring it to an end.”US oil and gas water use threatens harvest. c $1.2bn (£790m) in maize, soy and wheat crops may be at risk in US states where competition is high.UK spent 300 times more on fossil fuels then green energy. UK Export Finance tally for carbon £1.13bn, green energy £3.6m.Oil divestiture will hurt college endowments, says oil industry. The Independent Petroleum Association of America commissions a report that studies past 50 years.“Oil company employees should consider quitting their jobs.” It is becoming morally unacceptable for well-paid employees to carry on, says Jonathon Porritt.A UK shale industry would be incompatible with 2C target. So says Kevin AndersonWind capacity additions exceed fossil-fuels in 2014. EWEA figures show 11.8 GW wind, up 3.8% YOY to 128.8 GW. Gas & coal additions: 5.6 GW. All RE: 79.1%.SolarAid reaches 9 million Africans with 1.5 million solar lights. And a new campaign will aim to divert 5% of pioneering companies’ profits to proliferate such achievements.
9.2.15.‘The survival of the planet itself is at stake”. So French Foreign Minister Laurent Fabius tells UN climate talks in Geneva. Paris is crucial for world security, he says.Duke Energy takes majority stake in REC Solar. Largest US utility makes $225m available for the developer to help commercial partners go solar.“Brazil targets rooftop solar as hydro-dams run dry.” Two years of droughts have taken their toll. Government announces tax relief and incentives.“Why solar eclipsing oil may first cause a year-long crash, then a 17-year bull market.” Jon D. Markman offers a variant opinion.

HSBC Swiss subsidiary helped clients dodge taxes and hide millions. Secret files lift lid on practices. CEO Greene was “either asleep at he wheel” or involved, says Margaret Hodge.
6.2.15.Biggest two-week oil price rally in 17 years: >18% to >$58. The CBOE Crude Oil Volatility Index is at a six year high. Still the price is about half the level of June.Oil experts predict prices between $30 and $200. Bloomberg: “The only thing that’s certain is more uncertainty. Probably.”Jeremy Grantham predicts five years before the crash. The shale boom has bought time but “in a few years the global oil industry will be as if U.S. fracking had never existed.”US oil rig count is now down 25% since October. Drillers idled 83 this week, 94 last week. 30,000 jobs have gone and spending on exploration and production has fallen $116 bn.BP joins Shell in recommending shareholder resolution. The similar resolution, recommending a range of climate transparency goals, is signed by 50 institutional investors.“Why Barclays must quit bankrolling coal industry.” Jo Confino argues they must reconnect to their Quaker roots.The European EV market grew 37% in 2014. The UK, with its £5,000 grants, was the fastest growing. New registrations of EVs are still only 0.6% of all cars.
5.2.15.Business leaders call for zero net carbon by 2050. Their appeal to the climate negotiators is made by include Paul Polman of Unilever, Richard Branson, Ratan Tata, & others.Norway oil fund divested from 40 of coal mining companies in 2014. First report on responsible investing lists 140 companies dumped on env. grounds, incl. 5 tar sands.Scientists find vast lakes of meltwater stored under Greenland ice cap. Discovery adds to fears for future sea-level rise.Nuclear power is not “low carbon”, says Prof Keith Barnham. CO2 per unit of electricity is not 6 grams as DECC says, but well above 50, which would disqualify it on CCC criteria.
4.2.15.Health sector should divest from fossil fuels on ethical grounds. So says a coalition of medical organisations. The Wellcome Trust disagrees, but cannot give an example of engagement.“How long before an oil major follows E.ON?” Within 3 years, argues Jeremy Leggett. Because the pressures from capex cost-up and cleantech cost-down will become irresistible.“New Statoil boss signals renewable energy ambitions.” Eldar Saetre led the renewables division before being made acting CEO, now CEO.“Anything is possible in Paris”. RTCC.com analysis: “The few rules are likely to involve how countries measure, report and verify their GHG emissions.”Petrobras CEO to step down. But neither she nor the Brazalian President, Dilma Rousseff, ex Petrobras Chairman, were involved in corruption, apparently.
3.2.15.“Graph of the day: Collapse of the US shale industry.” The drop in rig count is now 24%.“The significance of this is that predictions of the shale bubble may now come true.”“Cash-starved oil producers trade treasured pipelines for money.” “At some point they all get desperate enough,” says one fund manager.BP slashes capex by 20%. Asset impairment is $6.5bn. The bulk of this comes from writedowns in the North Sea. Refuses to join Shell in supporting shareholder resolution on climate.BG writes down assets by $8.9bn to reflect low oil price. Most comes from a coalbed methane project in Queensland. Capex cut will be 30%.EPA says developing tar sands would significantly increase carbon emissions. In this it takes on the State Department and arms Obama to reject the KXL pipeline.Coal with CCS could increase future climate risk, a Smith School report concludes. Finite CCS should be held in reserve in case negative emissions technologies are required.Similar numbers support and oppose UK shale gas, poll finds. DECC finds 24% for, 23% opposed, 53% don’t know.Solar PV is the most popular energy source in the UK, with >80% support. Shale gas the least. Onshore wind has >70% support, contrary to government line.
2.2.15.Wounded oil companies turn to creative financing to stay afloat. Investors with the the case to weather a prolonged downturn are hunting for deals.Russian oil production remains near record level. Low prices fail to push production below 10.6mbd.Fracking would be banned from 40% of UK shale areas under new rules. Guardian analysis shows that groundwater special protection zones would exclude most.Shell prepares for costly decommissioning programme in the North Sea. Beginning with the topside of Brent Delta, in the field giving its name to the oil price.WMO says 14 of the 15 hottest years have now been since 2000. With 2014 as the hottest since records began.Risky Business project warns US business of climate impacts. Chairman of Cargill is among those making the case, in his instance on agriculture.Indian government sells 10% of Coal India for $3.6bn. A state-backed insurer was the single biggest bidder, however. And the state remains an 80% Coal India shareholder.“Why peak oil is finally here.” Ron Patterson on OilPrice.com: A graphic account of how US shale and Canadian tar sands are propping up falling production in the ROW.

“Arctic oil on life support.” So says oilprice.com, summarising all recent developments, emphasising the uniqueness of Shell’s intention to press ahead despite everything.BP cuts capex 10% after 40% full in quarterly profits. But the dividend is not expected to be cut when results are announced.Refiners say Obama should approve KXL because it enhances US energy security. It gets them off the Venezuela hook, etc, they say.“US coal crisis deepens as gas prices fall”: FT. Analysts expect multiple bankruptcies over the next 12-18 months.
31.1.15.Corruption at Petrobras “brings chaos to Brazil”. “Too big to fail and too corrupt to carry on as it is.” Says who? Only the FT.Two Wyoming pipeline operators tally 30 oil spills in last 10 years. >280,000 gallons of oil spilt, including into the Yellowstone River.
30.1.15.US rig count drop steepest ever. Baker-Hughes weekly data down 94 to 1,223. Oil price immediately spikes above $50. Mark Lewis talks of potential “milestone moment.”Nations taking advantage of low oil price to cut fossil fuel subsidies. IEA scraps $660bn by 2020 forecast, ($548bn in 2013). Renewables ($97bn in 2013) benefit.US oil and gasoline demand grows with low oil price. Year on year increase compared to same 4 weeks last year 0.8 mbd for oil (4.2%) and 0.65 mbd (8%).“Sometimes low gas prices do not cure low gas prices.” John Dizard in the FT says US LNG facilities could find contracts being cancelled.Chevron chief says oil price will rebound. It will have to, since very few large projects will go ahead under $50 a barrel.Corruption at Petrobras “brings chaos to Brazil”: FT. The most-indebted oil company ($170bn) is “too big to fail and too corrupt to carry on as it is.”Poll shows half Republicans support climate action. Two-thirds of Americans say they are more likely to vote for political candidates who campaign on fighting climate change.Pressure on diplomats to complete climate treaty draft in February. They meet in Geneva 8th -13th and co-chairs say text must be ready if UN schedule is to be kept to.Cheap oil can’t stop renewables now. 7 reasons: Sun & oil don’t compete, electricity prices still rise, solar prices still fall, EV sales are fine, pump prices fall < oil price, oil price will rise.
29.1.15.Shell board backs shareholder resolution on climate risk. In a “huge victory” for 150 activists representing billiong, the company backs deeper analysis of risk to its business.Denmark gears up to fight fracking. Total is due to begin shale exploration next month and locals have already set up a camp near the site.Analysts warn of growing moves away from fossil fuels. Jeremy Leggett and others describe rapidly shifting trends on a CERES press call ahead of O&G earnings calls. With audio.Shell announces that it plans to resume drilling in the Arctic. Despite $15bn of capex cuts in the next 3 years, CEO says it is important “not to overreact.”China puts moratorium on new coal mines in eastern region. The government is battling a big supply glut. Production has doubled since 2000, but consumption fell in 2014.Biofuels are not a green alternative to fossil fuels, says WRI. Solar PV systems can generate > 100x the usable energy per hectare as bioenergy.Balcombe residents face tax hurdle to solar use. Changes coming in April will restrict legal ability to set up community fundingschemes.
28.1.15.Scotland announces moratorium on fracking. The government wants time for a full public consultation and commission an enquiry into health impacts.Petrobras releases unaudited results delayed by corruption scandal. Showing $135bn debt, it cannot say how much money has beenstolen from it.Smaller oil explorers’ borrowing costs soar as oil price falls. Yields on bonds have leapt as investors begin to fear defaults.Low oil prices won’t hurt renewables, says EIA. Tax incentives are the vital ingredient, and oil is not in direct competition with renewables for electricity generation.FT raises questions about Hanergy’s fast growth. An investigation of the Chinese solar giant’s revenues shows most come from sales within group.
27.1.15.Chinese coal productions falls for the first time this century. Xinhua says much of the fall is due to environmental regulation by the government.Former SEC commissioner critiques Norway Fund experts report. Bevis Longstreth says “if the engagement strategy didn’t exist the fossil-fuel giants would by now have invented it.”
26.1.15.Obama and Modi promise to back ambitious climate treaty in Paris. Visit outcome includes agreement to boost solar and nuclear.OPEC’s El-Badri: $200 oil possible if investment shrivels. So he says in an interview in London, without giving a timeframe. Oil price rises 2.7%.MPs call for UK fracking moratorium. Environmental Audit Committee warns HMG is pushing through “undemocratic” laws and will undermine climate goals.Cameron rejects calls for UK fracking ban. The US shale revolution can be repeated in the UK, he insists.Osborne asks Cabinet to fast track fracking measures. Leaked letter to ministers requests dozens of interventions be made a “personal priority”.Labour forces a UK government U-turn on fracking fast-track. Tories have to accept restrictions to avoid a vote defeat on Infrastructure Bill.US scientists ascribe intense winter storms to climate change. Extra water vapour in atmosphere to blame. One is bearing down on the NE right now.

Energy groups prepare cuts in capex as earnings fall. Morgan Stanley estimates 20% down in O&G field development, Wood Mac 37% across industry ($170bn).Tight oil production to drop faster than most expect. Increase in pad drilling plus decreasingwell productivity means “sharper” fade as count falls, analyst says.Obama moves to put much of Arctic Refuge off limits for drilling. Alaskan lawmakers rush to the barricades: You negotiate with Iran but not with us, they allege.
24.1.15.Drillers retreat from North Dakota oil shale at fastest rate yet. The rig count drops by 49 this week as drillers bail with WTI at $45.“Oil collapse could trigger billions in bank losses.” Surge in junk loans to industy in recent years coming home to roost, the Telegraph worries.
23.1.15.Caudrilla asks to delay fracking application in Lancashire. It wants time to address the noise reservations of planners recommending rejection.Scientists find 2-3 times more methane leakage from Boston are than predicted. “Our findings suggest that natural-gas–consuming regions may …represent areas of significant resource loss.”
22.1.15.US Senate refuses to accept man’s role in climate change. 27 years after first NASA attribution, It defeats two measures attributing cause of climate change.MEP vote means carbon price now expected to rise by 2020. The EU industry committee votes against an unambitious package of proposals.Oil & gas industry accused of taking over renewables lobby to push gas. They have majority positions on European wind and solar trade bodies.Is Saudi Arabia opening the taps because it sees end of oil age coming? Elias Hinckley thinks they see inevitability of global climate action stranding assets.Former UK environment secretary advocates fracking ban. Caroline Spelman is a member of the Environmental Audit Committee.
21.1.15.Climate change makes a comeback at Davos.Larry Elliot argues that Stern’s economics makes more of an impact than Al Gore’s slide show.Environment Agency pension fund tells BP & Shell to invest in renewables. The £2.5bn fund has teamed up with >150 others for a shareholder resolution.Another setback for UK shale drillers. Lancashire County Council planning officers recommend rejection of Caudrilla’s application for traffic and noise reasons.Oil spill from Montana pipeline means bottled water for locals. Authorities recommend not drinking tapwater because of benzene levels.Austria to launch lawsuit on Hinkley C subsidies. Legal challenge to EU decision meansfinal investment decision could be delayed for more than two years.Obama strong on climate in State of Union address. He mocks the Republican “I am not a scientist” line, referencing NASA and NOAA and their views.Opec and oil bosses tell Davos oil will rise again. Overshoot risk, Eni and Total bosses warn. Latter cites 5% constant decline = >halving existing production by 2030.IEA chief warns oil price drop is slowing energy investments of all kinds. “The world will be in a problematicsituation in the next decade.”Saudi Arabia delays $109bn solar target 8 years: a third of electricity solar by 2040, not 2032, KaCare boss says, needing more time to assess technologies.BP boss tells BBC in Davos that oil prices will be low for up to 3 years. Ongoing investment and job cuts will reflect this judgement.
20.1.15.Europe launches diplomatic offensive pushing for strong Paris deal. 90,000 diplomats in >3,000 missions to lobby other nations after ministerial decision.PwC survey of CEOs does not even include climate change. This after only 10% expressed concern in the annual Davos survey last year.Total cuts capital spending by 10% and plans asset sales. Cuts to exploration and development include the North Sea, tar sands, Gabon and Congo.Credit line reset hovers over US oil drillers in April. Some will face a “liquidity spiral”, analysts fear, as banks cutcredit lines.Carbon-free stock index outperforms the market in 2014. The Fossil Free Indexes US (FFIUS), with 10% excluded, outperforms the S&P 500 by about 1.5%.Greenpeace wins funding battle with Indian government. Dehli High Court orders Modi government to release foreign contributions to Indian branch.
19.1.15.UK shale gas revolution falling flat. Guardian analysis shows only 11 new wells, and 9 scheduled for fracking – 8 new wells and one existing well.Analysts predict stagnant or falling oil production in Russia. Slump in crude prices is impairing investment.“Why 2015 is the year renewables will win.” I am full of cautious hope”, writes Jeremy Leggett on EcoHustler, “and here’s why.”Nearly 50% of global wealth held by the 1%. So a new Oxfam report finds, ahead of the World Economic Forum in Davos.

FT: “President Vladimir Putin said on Monday that Russia would stop construction of the South Stream gas pipeline, shelving a strategically important project that Moscow was counting on to cement its influence in south-eastern Europe.”(more…)

Mark Lewis for Kepler Cheuvreux (no url): “Despite the dramatic recent fall in oil prices, OPEC decided yesterday to maintain its current production quota of 30mbd, thereby compounding market fears of a short-term supply glut and prompting a further sharp drop in the Brent and WTI benchmarks (both down 6.3% on the day to $72.8/bbl and $69/bbl respectively).”(more…)

FT: “UK energy regulator Ofgem has outlined tough annual price controls for power distributors that it claims will cut £2.1bn from customer bills – equivalent to £11 per household – and increase compensation for extended power outages.”(more…)

The Winning of The Carbon War

Humanity is in a race, a kind of civil war. Believers in a safe future fuelled by endless sunlight and related forms of clean energy combat defenders of finite carbon fuels careless of the impact they have on the world by clinging to coal, oil, and gas. Jeremy Leggett fought for the light side for a quarter of a century as it lost battle after battle to the dark side. Then, in 2013, the tide began to turn. By 2015, it was clear the light side could win the war. Leggett’s diary from the front lines tells one person’s story of those turnaround years, and what they can mean for the world.